This post originally appeared here in the salesforce.com blog.
In my previous post, I discussed how sales training is at last shifting from sales reps to a role with far greater impact—sales managers. This is good news as elevating sales manager performance has a direct impact on the bottom line. The top quartile of sales managers get 18% more of their reps to quota than the lower-performing 75%. And organizations that allocate more than half of their total sales training budget to sales managers outperform by 12% those who allocate less than half of their budgets1.
But while redirecting training dollars to sales management is an encouraging step in the right direction, it raises a critical question: Is the training being given to managers impactful? Just because a company trains its sales managers doesn’t necessarily mean that training leads to an increase in the number of reps reaching quota (which, in our opinion, is the best measure of manager effectiveness). So we wondered: are the topics on which companies are training their managers leading to an improvement in the number of reps making quota?
The answer, unfortunately, is no. In our joint research with the Sales Management Association (SMA), we found an inverse relationship between the popularity of a training topic and its impact on organizational performance. In other words, the more a topic was on the training agenda, the less impact it had on results. For instance, the most widespread training topic for sales managers—sales methodology—led to some of the lowest performance gains (just 3.9%).
The underlying problem is that, of the top seven topics trained, six are targeted to what sales people do, not what sales managers do. Although most management training is ostensibly geared to managers, it is actually appropriate for reps. The mindset appears to be, if we just keep teaching managers how to sell better, they’ll get their teams to quota. But if they didn’t know how to sell, they wouldn’t be managers! Sales managers don’t need to know how to be better sellers, they need to know how to be better managers.
What about that one management-related topic in the top seven—is that one impactful? Nope. The single ‘top-seven’ training topic that is geared to management is not geared to sales management; it’s generic legal and HR compliance training that has zero impact on sales manager effectiveness or sales results. Training topics #8 (coaching) and #9 (leadership and culture), in order of popularity, suffer from the same problem, they are not specific to sales. As a result, they produced only a 9.2% and 8.6% lift in results, respectively.
SMA/Vantage Point
To find the most impactful training topics for sales managers, we need to look at the bottom of the popularity list because the farther down the prevalence scale we go, the greater the impact on revenue performance. The most powerful four training topics for sales managers—and the percentage lift in revenues associated with them—include:
- Assessing Sales Performance (15.6% lift). Managers need to be taught which leading indicators to monitor to assess whether they are getting the right lift in the KPIs that matter. And if they aren’t getting the right lift, they should know which course corrections to make and how to execute them.
- Pipeline Management (13.6% lift). Managers need direction to help sellers build healthy pipelines. This means pipelines of the right size with the right prospects. This training topic should also equip managers to coach to the health of the pipeline and coach sellers to move deals through the pipeline.
- Sales Forecasting (13.0% lift). While effective pipeline management, by design, leads to more accurate sales forecasting, managers need to be trained in how to do effective forecasting as well. Simply put: managers who are trained forecast more accurately than those who are not.
- Planning and Analysis (12.6% lift). This topic is about linking the revenue targets to specific KPIs and, ultimately, to high-impact seller activities.
Note that every one of these topics is directly relevant to the sales manager’s job. And every one of these topics would not be intuitive to a top performer promoted into the manager’s position: they need training on how to do them well. Note, too, that each of these topics is connected to the others. Companies that view these as individual topics miss out on achieving the full impact that comes from training them as interrelated topics. Each of the four areas also has a coaching aspect to it. Coaching as an isolated topic (at #8 on the popularity scale) has little impact, but coaching training as it relates to assessing sales performance, pipeline management, sales forecasting and planning/analysis, is where companies really see an improvement in the number of reps achieving quota.
Right now, there is a dramatic disconnect between what sales leaders think they should train and the topics that really make a difference to organizational performance. Once leaders train the four topics that do make an impact—and train them in an integrated, holistic way—they should see double-digit improvements in revenues.
1 Vantage Point/Sales Management Association sales management practices study